Your iPhone shows the correct location because it includes a GPS receiver that makes use of A-GPS or assisted GPS. The assisted part uses location data available with connected cell phone towers and/or with an available wi-fi network with the location of the associated wireless router's MAC address that has been recorded/registered to help speed up the initial GPS acquisition from a cold start.
The wi-fi only iPad does not have a GPS receiver nor a cellular data connection. It is relying on the recorded location of the router's MAC address for location services.
Apple formally used Skyhook's service for this. Skyhook includes an option at their website to register the location for your router's MAC address with their database for location services.
http://www.skyhookwireless.com/howitworks/submit_ap.php
Note: User submitted data is processed immediately by Skyhook. For most devices, this will mean you should immediately see the difference in your location. If you are moving an existing access point in our system, it may take up to 7 days for the new location to take effect on the device. Depending on the update frequency of our partners, data entered here can take up to 7 days to be included in their results.
I've read that Apple switched from using Skyhook's system for this to their own, but I don't know how this is updated in Apple's new system. A problem with this is it came under big time scrutiny not long ago in regards to privacy concerns. Google acquired this from available wi-fi routers while updating their street view maps - without anyone's knowledge or permission. Not sure if Google was fined but Apple came under some scrutiny as well.
Point being, Google was "clever" and got into some trouble over this. If this is being done automatically with Apple's new system for this, it may take several days or longer for the new location for your router's MAC address to be updated.
